In spite of concerns expressed by the European Commission about the high cost of medicines here in comparison with other EU countries, the progress made in reducing prices has been slow and uneven.
The latest development involves an agreement with pharmaceutical manufacturers that will contain HSE spending at €1.2 billion annually, and save the State an estimated €775 million over four years. On the face of it, that looks like a good deal. But the reality is that big pharma continues to call the shots.
The industry carries a big stick and is prepared to wave it when its interests are threatened. In recent years the message has been clear and unequivocal: if the State wishes to access new medicines, retain the benefits of the existing supply system, and continue a productive relationship with international companies, it will not take unilateral action.
That veiled threat regarding future drug availability and the possible loss of manufacturing plants, is not new. It was used to block government efforts to reduce prices in 2011 when pharmaceutical companies accounted for 50 per cent of all exports. Then, in 2013, the Health (Pricing and Supply of Medical Goods) Act was passed that gave the government the power to impose price cuts. When negotiations over costs stalled earlier this month that legislation was invoked and cuts of up to 30 per cent were proposed for some medicines.
The cost of prescription drugs nearly tripled between 2000 and 2008 and per capita expenditure was 43 per cent above the EU average. Under intense financial and public pressure, governments at first reduced dispensing charges for pharmacies and then favoured the substitution of generic medicines.
The present phase of reform is more problematical because of the economic power of manufacturers. Projected savings attract headlines, but much of this money may go on new drugs.
Agreement that future drug prices will be based on basket averages from 14 countries, rather than nine, is more significant. Big countries have lower prices.